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Income Tax- Corporations-Legal Expenses Incurred In Sale Of Assets Pursuant To A Section 337 Liquidation Are Deductible-United States V. Mountain States Mixed Feed Co., Michigan Law Review
Income Tax- Corporations-Legal Expenses Incurred In Sale Of Assets Pursuant To A Section 337 Liquidation Are Deductible-United States V. Mountain States Mixed Feed Co., Michigan Law Review
Michigan Law Review
In 1961, the stockholders of the Mountain States Mixed Feed Co. voted to liquidate the corporation in such a way as to comply with the requirements of section 337 of the Internal Revenue Code of 1954 (Code). That section provides that if a corporation adopts a plan of complete liquidation, and then within twelve months distributes all its assets, it will not recognize a gain or loss for income tax purposes from the sale or exchange of certain types of property. The corporation sold all of its assets and qualified for non-recognition treatment under section 337. It then claimed a …
A Tax Formula To Restore The Historical Effects Of The Antitrust Treble Damage Provisions (An Open Letter To The Senate Antitrust And Monopoly Committee), L. Hart Wright
Michigan Law Review
Following the well-publicized criminal conviction of a major segment of our electrical equipment industry for conspiring to fix and maintain prices, terms, and conditions of sales made to both private industry and the government, almost 2,000 private antitrust treble damage suits were brought against those convicted. In July, 1964, when at least 1,500 of these suits were still pending, the Commissioner of Internal Revenue publicly announced that amounts paid or "incurred" by the defendants in those actions to private plaintiffs, either pursuant to judgment or by way of settlement, together with legal expenses pertaining thereto, were deductible as ordinary and …
Costs Of Unsuccessful Criminal Defense Are Deductible "Ordinary And Necessary" Business Expenses--Tellier V. Commissioner, Michigan Law Review
Costs Of Unsuccessful Criminal Defense Are Deductible "Ordinary And Necessary" Business Expenses--Tellier V. Commissioner, Michigan Law Review
Michigan Law Review
Taxpayer, a broker and underwriter, was convicted for violations of the Securities Act of 1933 and the federal mail fraud statute, and for conspiracy to violate those statutes. He claimed a deduction for the legal expenses incurred in his defense. The Commissioner's disallowance of the deduction was sustained by the Tax Court. On appeal to the Court of Appeals for the Second Circuit sitting en banc, held, reversed. Legal expenses incurred in an unsuccessful defense against criminal charges arising out of a trade or occupation are deductible "ordinary and necessary" business expenses.
Retention Of Control Over Stock Constitutes "Ownership" Under Section 1239 Of The Internal Revenue Code-Harry Trotz, Michigan Law Review
Retention Of Control Over Stock Constitutes "Ownership" Under Section 1239 Of The Internal Revenue Code-Harry Trotz, Michigan Law Review
Michigan Law Review
Petitioner set up a corporation, retaining seventy-nine per cent of the stock and -distributing the remainder to a third party. The third party borrowed from petitioner, pledging his stock as security and executing an option agreement under which the petitioner could recover the stock at any time. Subsequently, the newly organized corporation purchased all the depreciable assets of petitioner's proprietorship at a price in excess of their adjusted basis; petitioner reported the difference as a capital gain. The Commissioner declared a deficiency, relying on section 1239 of the Internal Revenue Code, which treats as ordinary income the gain recognized from …
Taxation-Federal Income Tax-Accrual Of State Property Taxes Paid Under Protest, Robert L. Harmon
Taxation-Federal Income Tax-Accrual Of State Property Taxes Paid Under Protest, Robert L. Harmon
Michigan Law Review
During the years 1946 to 1950 a local tax upon respondent's real property was assessed at one hundred dollars. Respondent paid the full assessment to avoid interest penalties and seizure and sale of the property under tax liens, but contested the assessment in the state court, denying any liability greater than eighty-five dollars. In each of the preceding years, complying with a private ruling directed to it by the Commissioner, respondent had deducted the full one hundred dollars, and, when in 1951 the tax was fixed by the state court at ninety-five dollars, respondent included the five-dollar refund in its …
Taxation - Federal Income Tax - Deductibility Of Seminar Cruise As Business Expense, Thomas W. Van Dyke
Taxation - Federal Income Tax - Deductibility Of Seminar Cruise As Business Expense, Thomas W. Van Dyke
Michigan Law Review
Petitioner, a physician, participated in a postgraduate medical seminar held aboard a passenger ship during an eighteen-day cruise of the Mediterranean. A number of hour-long lectures followed by discussion periods were held on the ship during each of the six or seven days it was at sea and occasionally while in port; additional study was not required. Petitioner spent most of his time in leisurely activities aboard ship and in sightseeing. All expenses of the course and cruise were included in one charge which petitioner claimed as an ordinary and necessary business expense under section 162 (a) . The Commissioner …
Taxation- Federal Income Tax - Deductible Contributions To Nonqualified Profit-Sharing Plans, Robert M. Steed
Taxation- Federal Income Tax - Deductible Contributions To Nonqualified Profit-Sharing Plans, Robert M. Steed
Michigan Law Review
In 1942 plaintiff employer adopted a profit-sharing plan under which a percentage of each year's profits was to be deposited in irrevocable trusts for distribution to its employees in succeeding years. The plan was not "qualified" under the Internal Revenue Code. Although under the terms of the trusts each employee's rights in the fund vested at the time the contribution was made by the employer, these rights would be forfeited by voluntary resignation prior to a fixed date. In 1945 plaintiff deducted the amount contributed to the trust in that year as a contribution to a non-qualified profit-sharing plan under …
Taxation - Ordinary And Necessary Expenses - Deduction Of Advertising Expenses Incurred To Defeat State Initiative Measures, Robert J. Paley S.Ed.
Taxation - Ordinary And Necessary Expenses - Deduction Of Advertising Expenses Incurred To Defeat State Initiative Measures, Robert J. Paley S.Ed.
Michigan Law Review
Petitioners were members of a partnership engaged in the wholesale distribution of beer in Washington. In 1948 the partnership made contributions to a publicity campaign instituted to defeat an initiative to be presented to the voting public, the passage of which would have placed retail beer and wine sales exclusively in state hands. In their 1948 tax returns petitioners deducted the amount contributed as ordinary and necessary business expense. After the Commissioner disallowed the deduction the petitioners paid the deficiency under protest and sued for a refund in the district court. That court denied the refund, ruling that the payments …
Taxation - Federal Income Tax Deductibility Of Interest On Debentures Issues As A Dividend, Jules M. Perlberg
Taxation - Federal Income Tax Deductibility Of Interest On Debentures Issues As A Dividend, Jules M. Perlberg
Michigan Law Review
Taxpayer, a wholly-owned subsidiary corporation, had filed consolidated returns with its parent prior to 1934. When Congress abolished consolidated returns in that year, the subsidiary issued 6% debentures as a dividend to the parent company and subsequently deducted the interest paid on these bonds. The Commissioner claimed the interest payments were really dividends and were not deductible. The Tax Court upheld the Commissioner pointing out the tax-saving motive, absence of new investment, and parent-subsidiary relationship as factors indicating that no genuine debtor-creditor relationship existed. On appeal, held, reversed. The debentures involved were conventional in form and created a valid …
Taxation - Federal Income Tax - Deductibility Of Transportation Expenses Between Two Places Of Current Employment, George E. Ewing S.Ed.
Taxation - Federal Income Tax - Deductibility Of Transportation Expenses Between Two Places Of Current Employment, George E. Ewing S.Ed.
Michigan Law Review
Petitioner was employed as a high school principal by the city of Attleboro, Massachusetts, where he lived. He was also employed as an accounting instructor by Boston University, thirty-seven miles distant, two evenings a week for thirty-two weeks during the taxable year. He used his personal automobile to travel between the two cities and did not remain overnight in Boston. Neither employer expressly required him to incur any transportation expenses in connection with his teaching duties and there was no arrangement for reimbursement of transportation costs. The Tax Court affirmed the Commissioner's disallowance-- of a deduction for the automobile expenses …
Taxation - Federal Income Tax - Deductibility Of Expenses Incurred By Attorney In Attending Tax Institute, John E. Riecker S.Ed.
Taxation - Federal Income Tax - Deductibility Of Expenses Incurred By Attorney In Attending Tax Institute, John E. Riecker S.Ed.
Michigan Law Review
Petitioner was a member of a firm of lawyers engaged in general practice in Binghamton, New York. The firm did enough work in federal taxation to warrant petitioner's specializing in this field, and his partners relied upon him to keep abreast of all significant developments in tax law. Petitioner attended the Fifth Annual Institute on Federal Taxation, conducted in New York City under the sponsorship of New York University and designed exclusively for practitioners and specialists in the tax field. He incurred expenses for travel, board, lodging, and tuition, all of which he deducted as ordinary and necessary business expenses …
Taxation - Federal Income Tax - Deductibility By An Employee Of Sum Paid In Settlement Of Claim Arising From His Operation Of Automobile Used In Company's Business, Richard B. Barnett S.Ed.
Taxation - Federal Income Tax - Deductibility By An Employee Of Sum Paid In Settlement Of Claim Arising From His Operation Of Automobile Used In Company's Business, Richard B. Barnett S.Ed.
Michigan Law Review
Petitioner and one Elkins were employed by a corporation which they had organized to engage in the electrical contracting business. They furnished their own automobiles to transport men and material from job to job, and were reimbursed by the corporation for operating expenses. The corporation also paid for insurance and repairs of the automobiles. While Elkins was using petitioner's car to drive two employees to a job in progress, a collision occurred causing personal injuries to the two employees, who recovered a judgment against petitioner which he finally settled by payment of $4,000 in excess of the amount of the …
Realization Of Income Through Cancellations, Modifications, And Bargain Purchases Of Indebtedness: Ii, L. Hart Wright
Realization Of Income Through Cancellations, Modifications, And Bargain Purchases Of Indebtedness: Ii, L. Hart Wright
Michigan Law Review
Introductory note. That some matters relating to the particular consideration received by a debtor on incurring an obligation would affect the applicability of the Kirby case to a saving derived by him from a subsequent cancellation or other bargain discharge was one of the first propositions settled by the Supreme Court. For the Kirby case itself justified the earlier immunity which had been granted the apparently solvent Kerbaugh-Empire Company on the ground that the funds which the latter had borrowed were lost in the venture for which its loan had been procured.
The Case Of The Forgotten Basis: An Admonition To Victims Of Internal Revenue Code Section 115(G), Richard Katcher
The Case Of The Forgotten Basis: An Admonition To Victims Of Internal Revenue Code Section 115(G), Richard Katcher
Michigan Law Review
It is the purpose of this article to explore the various means available to a victim of section 115(g) for recovering the basis of his cancelled stock and to examine the reasons that may be advanced in support of the conclusion that the victim should be allowed a capital loss deduction measured by the amount of the basis.